From Central America to Europe to Asia, popular support for privatization is declining, a recent World Bank report says.Privatisation: Trends and Recent Developments
lists several troubled privatization deals around the world, including water and sewage concessions in Argentina and Bolivia and re-nationalization initiatives, such as Rail Track in the UK and Air New Zealand (a US$300 million government rescue package).
The report also quotes public opinion polls over the past few years. For example, one poll showed Latin American popular support for privatization fell from 75 per cent in 1975 to 35 per cent in 2002. Only 28 per cent of those polled believed that privatization had been beneficial to their country, and 70 per cent wanted the state to take charge of water and power delivery.
In sub-Saharan Africa, a 2001 survey of 15 countries undergoing economic “reforms” found that less than 35 per cent of the populations preferred privatization to state ownership.
In 16 countries in Eastern and Central Europe, 52 per cent supported private over state ownership in 2001. Yet in Russia, 70 per cent of the population felt they were worse off after privatization and preferred state ownership.
A survey of eight countries in East Asia found that only 33 per cent favour privatization. In Sri Lanka, between 60 to 80 per cent of people believe their living conditions got worse after privatization
The World Bank report identifies several reasons for this decline in public opinion, including cultural and historical traditions of state ownership, badly designed privatization deals, and “the overselling of privatization and creation of unrealistic expectations; (and) generally worsening economic conditions and painful liberalizing reforms that became associated with privatization.”
Given the increasingly vehement community-based opposition to privatization deals around the world, these conclusions could not have come as a surprise to World Bank officials. However, despite recognizing that privatization no longer impresses people, the World Bank shows no signs of scaling back its enthusiastic support for privatization deals in the world’s poorest countries.
Even acknowledging in 2005 that, as far as the water sector is concerned, “there is no statistically significant difference between the efficiency performance of public and private operators,” the World Bank persists.